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Chinese Tariff Review in 1925

CHINA'S SPREE of revolution, banditry, rioting and disorder is to be ended, it seems, by the gold treatment, and the gold is to be found by raising China's tariff wall a little higher, if the plans favored by the Government at Washington work out successfully.

Whatever others may think about it, the American press believe the plan a good one. The acceptance by the United States, Great Britain, and Japan of China's invitation to a customs conference at Peking next month are indication to the Norfolk Virginian-Pilot and other representative newspapers that " the Chinese outlook has become noticeably brighter." True, we are reminded by the Providence Journal, "it has taken three and a half years for the United States, Belgium, Great Britain, France, Italy, Japan, the Netherlands and Portugal to ratify the treaty signed at Washington." But, points out the New York Times, "the day has arrived when the treaty Powers can proceed with what-ever joint activity they deem necessary in order to help China out of her present troubles." Practical relief, this paper believes, "must come by way of a tariff conference."

"The main purpose of the October conference," explains the Philadelphia Public Ledger, "is to get for the Peking Government tariff increases sufficient to effect its financial rehabilitation. This would go far toward putting an end to the governmental confusion that has existed in China for more than a decade." The conference hopes to abolish the li-kin, or provincial taxes, and to accord to China a surtax increase of from 2 1/2 per cent. to 7 1/2 per cent. on certain imports, says the Washington correspondent of the New York Times.

A victory for American diplomacy is seen by the majority of American papers in the ratification by France of the treaty and the calling of the conference at Peking. In fact, notes the Philadelphia Public Ledger, "the tariff conference might have been postponed indefinitely but for the strong attitude assumed by the United States." The representatives of this Government will be John Van A. MacMurray, America's new Minister to China, and Silas Strawn, Chicago attorney and tariff expert.

"If a beginning is to be made to stabilize China, it must start with a revision of the customs duties," declares the San Francisco Chronicle, and we read on in The World:

"Tariff revision is urgent, for upon it depends the vigor of the central Government. Since 1842 China has been restricted to a 5-per-cent. tariff. The schedule has several times been revised; the rate, never. Since these customs receipts have been mort-gaged for indemnities and loans, the administration is in foreign hands. China, in brief, lacks even the shadow of fiscal independence; and one reason why the Peking Government is impotent is its financial starvation. A higher tariff will strengthen the central authorities, help liquidate the debt and benefit certain industries. Hand in hand with it should go abolition of the li-kin, or provincial imposts. These hinder all trade and give the military governors the chief revenues with which they defy Peking and the forces of law and order.

"If there were no other reason for cooperative Western action it would lie in the unabated chaos of Chinese affairs. The authority of the central Government has been almost destroyed, and military governors rule the Provinces to suit themselves. The Peking Treasury is notoriously bankrupt. Enterprise throughout much of China is stifled, and capital has drained to the treaty ports as the only safe place of investment. River conservation has been neglected, with the result of dangerous floods; the weak rail system, only some 6,000 miles, is debt-burdened and deteriorating. Banditry has filled whole Provinces with a terrorism like that of the medieval condottieri. The opium evil thrives unchecked."

"China is tired of sympathy," asserts the Louisville Post.

"What she wants is to be let alone to conduct her own affairs." Already, we read in Washington dispatches, China is making a beginning. She has just created a commission for the consideration of the financial reorganization of the country. Chief among its problems will be the balancing of the budget and the reorganization of national and local taxation.

"The United States has cleared the way through diplomatic channels for the Peking customs conference," observes the New York Evening Post, "but the path to success will require rough hewing." "Already the reluctant Powers are looking about for a monkey-wrench to throw into the machinery," asserts the St. Louis Star. For example, China owes Japan some $164,000,000, and Japan, says a Tokyo dispatch, "will insist at the conference on the prompt payment of this loan." "If Japan persists in this course, there is small prospect that the conference will succeed," thinks The World. Furthermore, we are told, Japan's demand will also breed controversy at the meeting by raising the question of the payment of loans made by British, American, and other interests. Still another obstacle is seen by The Star, which says, in an editorial headed, "Japan's Sincerity Questioned";

"Japan wants the Peking Government to guarantee that there shall be no more boycotts against her goods. An impossible demand—but it serves as well as anything to provoke discussion while something more tangible can be worked up. No Government can make such a guaranty and keep it, and especially is it impossible for Peking to enter into such an undertaking sincerely. Japan knows this quite well. Therefore, she has an alternative demand—that China pay her debts immediately from the increased revenues she is to derive from the increased customs.

"This proposal is as ridiculous as the first. Peking is asking the increased revenue in order that she may spread her authority. If paid over to Japan immediately upon its receipt this plan will be balked—as Japan very well knows."

"A discussion of foreign-debt problems would be most un-fortunate," agrees the New York Journal of Commerce, which believes that "if the October conference is to be used merely as an agent for extracting money from a feeble Government, then it had much better not convene at all." "If success is to mark the coming negotiations," agrees the Philadelphia Public Ledger, "they must be confined to the matter at hand—tariff revision. The rehabilitation of the Chinese Government must be gradual, and revision of the tariff schedule is but a single step."

"The big fight at the conference," predicts the Washington News, "will be over China's desire to be left free, like any other nation, to fix its own tariff duties." In the opinion of the Newark News:

"This constitutes one bit of flint in the powder magazine at Peking. China is going to claim that it must be allowed to make its own tariff schedules and that the Powers must keep their hands off. If this claim is stept on with iron heel, there is a chance for an explosion that may spread along a far-flung powder-line into Europe, Asia and America, touching capitals from Tokyo westward to Moscow, Berlin, Paris and Washington.

"China owes money to many of these Powers. That is why they have controlled the collection and disbursement of the Chinese customs revenue ever since 1858, and that is why the majority of them do not want to give up that control now.

"Great Britain, Japan and other Powers are afraid of admitting officially that China is right about tariff autonomy, for they see a train of powder running direct from it toward a pile of explosives known in diplomatic language as extraterritoriality. In plainer words, that means the right of foreigners not to be subject to the laws and the courts of China, but to have the right of trial in mixed courts or by their own consular representatives.

"Then the powder-train runs to concessions under which forty-nine cities of China are practically ruled by foreigners, while Chinese pay the bulk of the taxes and have no representation.

"Next in the danger-zone would be spheres of influence, where particular nations have special rights of trading. These nations are jealous of each other, and suspicious, too, despite their association under the Nine-Power Treaty.

"The Powers want to safeguard against an explosion to protect themselves. But if they overdo the protection business, China may explode from spontaneous combustion. In that event, the fat of the Powers would be in the fire.

"New national groupings might result from such an outbreak. The much-dreaded and long-predicted conflict between East and West might be precipitated. In order to avoid that and other possibilities of renewed warfare, that would not be confined in its effects to the East, and that would be costly in trade and in human life, some method must be found that will be acceptable to China and fair to the world at large. It is as vitally interesting to Americans as it is to China that the October conference be guided wisely in reaching its conclusions."

Source: The Literary Digest for September 12, 1925